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Some of the world’s biggest sovereign wealth funds are increasingly striking their own private equity deals rather than relying on external fund managers, in a drive to cut costs and gain more control.

With some $6.5 trillion in assets, sovereign investors already account for 19 percent of capital committed to private equity, according to data from research firm Preqin.

But mega-funds such as the Abu Dhabi Investment Authority (ADIA), Saudi Arabia’s Public Investment Fund (PIF) and Singapore’s GIC, are hiring specialists to find or vet deals – enabling them to negotiate with private equity firms from a position of strength or to go it alone.

In 2012 sovereign investors participated in just 77 direct private equity deals. By 2016, that had risen to 137, Thomson Reuters data shows. Deal value more than trebled to $45.2 billion from $14.8 billion.

For target companies it could mean longer-term investors with deeper pockets. Private equityfunds typically look to sell within three to five years, but sovereign funds often an take investment view stretching over decades.

The trend is driven partly by a need to work assets harder as returns shrink, and partly by a conviction that only through originating or structuring deals themselves can sovereign funds get what they want.

“It’s a natural evolution. If you do it yourself, you not only reduce the fees, you get greater control over the pricing of the deal,” said Babak Nikravesh, a San Francisco-based partner at law firm Hogan Lovells, who represents sovereign investors.

This allows funds to better protect their interests when markets go south. One sovereign investor who spoke on condition of anonymity said that during the global financial crisis, some external funds behaved irrationally.

“They had different liability streams than us, so they were under pressure to sell at a time when they should have been investing more,” the source said. “Going more direct means you don’t have to worry about whether your interests are aligned with other investors’.”

Some funds still rely on private equity funds to find deals and commit capital on their behalf, but not many can take the amount of capital the sovereign investors want to commit. There is also growing disenchantment with the industry’s traditional 2 percent management fee and 20 percent performance fee model.

A Preqin survey found 39 percent of institutional investors polled in December 2016 cited fees as one of the key challenges facing the industry, up from 19 percent in 2015.

“The fees are very high and swallow a large chunk of the returns, so there is a big desire to look at how can they do this more efficiently,” said Elliot Hentov, head of policy and research in the official institutions group at State Street Global Advisors.

For the oil-backed funds, low oil prices mean the days of plenty are over, while lacklustre returns from publicly listed assets mean more funds are missing targets. As a result, sovereign funds may be under pressure to manage their portfolios more actively.

HIRING TALENT

To this end, Saudi’s PIF signalled a switch to a higher- risk, more-active strategy when it purchased a $3.5 billion stake in Uber last year.

It recruited Kevin O’Donnell from Kaiser Permanente as head of global private equity and is the lead investment partner in a technology fund jointly established with Japan’s Softbank Group .

ADIA, estimated by the SWF Institute to have some $792 billion in assets, has added people with direct transaction experience and hired regional and sector specialists in its private equitydepartment. This now has around 40 investment professionals headed by ex-GE executive Sherwood Dodge.

The aim is to participate earlier in originating, valuing and structuring deals alongside privateequity firms. Together with TDR Capital, ADIA was one of the largest investors in the acquisition of LeasePlan Corp.

And GIC, which has been at the forefront of the direct investment trend, now has boots on the ground in San Francisco, New York and London. Local offices help investors source proprietary deals and avoid going through auctions, keeping costs down.

GIC has landed a string of deals in the past year, partnering with private equity firm Golden Gate Capital to take U.S. telecoms group Neustar private and buying a stake in digital maps company HERE, to name two.

Sovereign funds are also partnering more with their each other, rather than relying on privateequity firms. The Russian Direct Investment Fund (RDIF) has joint investment vehicles with China, Kuwait, Qatar, France and Korea, among others.

“When we invest with sovereign wealth partners, we help the business and we can generate significant positive returns,” said its chief executive, Kirill Dmitriev. He cited a co-investment in French glass manufacturer ARC International with Chinese and Middle Eastern partners, which has helped ARC grow in China, the Middle East and Russia.

But for the industry as a whole, it remains difficult to tell whether going direct is more profitable than investing via third parties. “In theory, you’re saving money on management fees, but it depends how good you are at choosing the investments,” said Nikravesh at Hogan Lovells.